When auditors conclude that an internal control is effective, they will rely on the control to prevent and detect a material misstatement and reduce their detailed substantive procedures.

Question 1 options:

	True
	False

Question 2 (1 point)

When conducting substantive testing, an increase in the auditor's assessment of the risk of material misstatement will result in an increase in the size of the sample.

Question 2 options:

	True
	False

Question 3 (1 point)

When conducting substantive testing, an increase in the auditor's assessment of the risk of material misstatement will result in an increase in the size of the sample.

Question 3 options:

	concludes that their client's internal controls are ineffective when they are effective.
	concludes that their client's internal controls are effective when they are ineffective.
	both a and b
	none of the above

Question 4 (1 point)

Which of the following is a factor that influences the sample size when testing controls?

Question 4 options:

	stratification of the population when appropriate
	an increase in the auditor's assessment of the risk of material misstatement
	an increase in the tolerable rate of deviation
	an increase in tolerable misstatement

Question 5 (1 point)

When testing controls, a decrease in the sample size will occur when there is

Question 5 options:

	an increase in the extent to which the auditor's risk assessment takes into account relevant controls.
	an increase in the number of sampling units in the population.
	a decrease in the tolerable rate of deviation.
	an increase in the tolerable rate of deviation.

Question 6 (1 point)

An account is at a higher risk of misstatement when it requires

Question 6 options:

	complex calculations.
	estimation.
	both a and b
	simple valuation techniques.

Question 7 (1 point)

If the total projected error in an account balance was $3,248 and the tolerable error was set at $10,000, the auditor would

Question 7 options:

	decide that further audit work was required.
	conclude that the errors detected are not material.
	conduct other tests aimed at the assertion being tested.
	conclude that the errors uncovered are material.

Question 8 (1 point)

Matilda Papas has been asked to lead her audit team in the audit of the Toronto Raptors basketball team. She performed a review of their risks and found that the teams risks tend to be driven by the nature of certain significant accounts or business activities that the Raptors pursue. This risk is

Question 8 options:

	audit risk.
	inherent risk.
	detection risk.
	control risk.

Question 9 (1 point)

Substantive testing can be conducted using which of the following procedures?

Question 9 options:

	enquiry
	confirmation
	analytical review
	all of the above

Question 12 (1 point)

A substantive test that an auditor would only conduct at year end is

Question 12 options:

	testing the mathematical accuracy of invoices.
	review of the audit clients credit procedures.
	physical inspection of assets on hand.
	confirmation of accounts receivable.

Question 13 (1 point)

Jocelyne Yu is performing procedures and has decided to vouch the balance in the fixed assets ledger of a furniture manufacturing company back to supporting documentation. She is performing a:

Question 13 options:

	test of details.
	test of controls.
	risk assessment.
	none of the above

Question 14 (1 point)

The primary purpose of vouching is to ensure that

Question 14 options:

	sufficient information is disclosed in the notes to the financial statements.
	the balances or transactions are not understated.
	all transactions have been recorded.
	the balances or transactions are not overstated.

Question 15 (1 point)

Normally, it is more efficient to carry out substantive procedures than to test and rely on controls.

Question 15 options:

	True
	False